Neste Oil develops renewables into business worth billions

Neste Oil's renewable diesel fuel-based on renewable raw materials has become a significant part of the company's business activities. Development work has been done with the support of Tekes.

In April 2013 Neste Oil announced, in connection with its first quarter results, that its renewable fuels business activities were clearly in the black. This was a significant milestone in the persevering development work, which began already in the early 1990s. The research and development project turned into a business activity in the late 2000s.

"In five years we have turned renewable fuels into a business operation with an annual turnover of about 2.5 billion euros. In 2012 renewable fuels brought 11 percent of all of the turnover of Neste Oil", says CEO Matti Lievonen.

With an annual production capacity of two million tons, Neste Oil is the world's largest manufacturer of renewable diesel oil. The company produces renewable diesel at refineries in Singapore, Rotterdam, and Porvoo.

Tekes has shared the risk

The production of renewable diesel fuel is based on NExBTL technology, which came about as a result of Neste Oil's own research and development work. Behind the production method is research in organic and non-organic chemistry, reaction chemistry, reaction kinetics, simulation, and the modelling of the characteristics of feed materials. Toward the end of the development work the focus has been on process technology, catalysts, and achieved product characteristics.

In recent years Neste Oil has invested about ten million euros a year into R & D projects linked with synthetic fuels. In the most intense years of development, they accounted for as much as 80 percent of all R&D costs.

Tekes has supported R&D projects for Neste Oil's renewable fuels with research and development assistance, and with product development loans already for more than 10 years. At its greatest, the funding has been 2-3 million euros a year.

The earliest projects were implemented in the Tekes bioenergy programmes, and the most recent in the BioRefine programme. Through the programmes Neste Oil has also conducted research and development work with SMEs and research institutions. Collaboration has been the most apparent in research that has stepped into territory which used to be foreign to Neste Oil. These include the utilisation of biomass by-products and biotech processes.

CEO Matti Lievonen says that with the help of Tekes, Neste Oil has managed to give an exceptionally large input into the development of new technology, by Finnish standards.

"Funding from Tekes has been a significant factor. By sharing economic risk, Tekes has accelerated the implementation of projects, and has allowed for the parallel study of alternate solutions."

Development work continues

With the help of NExBTL technology renewable diesel can be produced flexibly from different types of vegetable oils, and from waste and scraps. Neste Oil is currently the only biofuel producer in the world that is capable of producing renewable fuels from more than ten renewable raw materials.

"In recent years we have especially increased the use of waste and scraps. In 2012 they accounted for 35 percent of all of the raw materials that we used", Matti Lievonen says.

At the Neste Oil laboratory in Porvoo, research and development work continues to expand the raw material base.

"Tekes continues to play a significant role in sharing the economic risk. For instance we received a product development loan for the construction of an experimental plant for microbiological oil, whose repayment is negotiable, if we fail in our development work", Lievonen says.

New applications are constantly being developed for NExBTL technology. Examples of this are renewable aviation fuel, bio-naphtha and biopropane for the production of biological plastics.